Well, when I drafted this, it was a recent publication I wanted to announce, but now that I have some free time, I can finish it...
The March issue of Environmental and Resource Economics is a special issue on "Benefit Transfer: Current Practice and Future Prospects." Most of the papers arose from an EPA-sponsored workshop on benefit transfer; either through direct funding, as comments, or to introduce the issue. Kerry Smith put a ton of intellectual capital into identifying topics and authors for commissioned papers, and he wrote the introduction to the issue:
This paper introduces a special issue devoted to the benefits transfer methods used as part of benefit costs analysis for policy analysis. Benefits transfer methods, as they are applied for environmental policy analyses, use economic concepts together with existing empirical estimates to predict the incremental benefits from a change in some feature of an environmental resource. After giving two examples of the decisions that analysts confront in performing these analyses, I discuss the interconnections between the papers in this issue and the research challenges that emerged from discussions of them.
I helped contribute to organize the workshop and contribute to an EPA overview paper on benefit transfer challenges. I also discussed a paper by Laura Blow and Richard Blundell using non-parametric revealed preference to value environmental quality changes:
We develop an approach to valuing non-market goods using nonparametric revealed preference analysis. We show how nonparametric methods can also be used to bound the welfare effects of changes in the provision of a non-market good. Our main context is one in which the non-market good affects the marginal utility of consuming a related market good. This can also be framed as a shift in the taste for, or quality of, the market good. A systematic approach for incorporating quality/taste variation into a revealed preference framework for heterogeneous consumers is developed. This enables the recovery of the minimal variation in quality required to rationalise observed choices of related market goods. The variation in quality appears as a adjustment to the price for related market goods which then allows a revealed preference approach to bounding compensation measures of welfare effects to be applied.
This was actually one of harder things I have had to do at EPA. I volunteered to be a discussant because I could recall being exposed to the technique in micro theory (Varian was one of the earlier developers and it's in his textbook). This method has not been used much in environmental economics (I only found four examples) but allows bounding of indifference curves--and therefore welfare measures--without functional form assumptions. Let me try to sketch the logic. In the figure below, there are two goods (superscripted) with one observed choice (subscripted). The shaded area RW is revealed worse, because any choice in that area was attainable but not chosen. The shaded area RP is revealed preferred, because any choice in that area would have strictly more of both goods. The indifference curve must therefore line in the unshaded area.
Now, if you have more choices, you can narrow the indifference curve.
There are further details in the paper on how to tighten the estimates of the indifference curves and then bound welfare estimates. The idea for benefit transfer (and let's be clear, this was Kerry's idea) is to use these kinds of estimates to help us benchmark parametric estimates of welfare. But it's a really cool paper!
Also in the issue are a paper by Cathy Kling and Dan Phaneuf on scope and adding up; and a paper by four current or former EPA authors (Steve Newbold, Patrick Walsh, Matt Massey, and Julie Hewitt) that improves a meta-regression framework by imposing theoretically-consistent assumptions on the functional form. And Kevin Boyle and Jeff Wooldridge have a great paper on how to handle errors structures and panel data in meta-regressions. And there are more, but I don't have a lot to say about them.
Important note: Whitehead (2016) gets a lot of love in this issue.
This work is not a product of the United States Government or the United States Environmental Protection Agency, and the author is not doing this work in any governmental capacity. The views expressed are those of the author only and do not necessarily represent those of the United States or the US EPA.